British Columbia's privacy commissioner has launched an investigation into BC Hydro's Smart Meter program after complaints that the information collected by the device breaches personal privacy.

Elizabeth Denham said Thursday that the investigation will ensure that the program designed to measure energy consumption complies with the privacy law and Hydro's obligations regarding collection, use, disclosure, retention and security of personal information.

The utility started installing the meters in Prince George and Richmond this week and plans to have 1.8 million of them in homes and businesses throughout the province by the end of next year.

Denham said that rather than measuring energy use for each billing period as is currently the case, smart meters provide more frequent information about people's electricity use.

The information gathered from individual homes will be transmitted wirelessly back to the Crown corporation, detailing peak usage and other information.

"The privacy and security of energy consumption data is a very real issue for citizens throughout the province," she said in a statement. "With an increase in the frequency of the information collected from Smart Meters comes an increased responsibility on BC Hydro to ensure that privacy and security is built into the Smart grid."

BC Hydro has been consulting with Denham's office on the privacy and security implications of its smart meters, and the commissioner said the utility has committed to fully co-operate with the investigation.

Hydro has said that consumption data will remain secure and private, as it is now, and that the information will be encrypted, "much like online banking."

The meters are expected to display energy consumption information in kilowatts or the equivalent dollar amount as well as provide usage patterns for various appliances.